What is in the future of distribution? Local producers will send genuine Made in Italy products abroad

What does the future of distribution look like? On the last day of "Taste 2022", the Pitti Image event held in Florence that looks to the future comparing the primary successful Italian experiences in the sector, "Il Gastronauta" Davide Paolini discussed the topic, “New distribution models for short chain products" in the "Taste Ring". He said it would focus on local producers distributing genuine Made in Italy products abroad. There are the pioneers, like Eataly that after having introduced small excellent Italian productions all over the world, have announced their next goal, which is to reach 100% organic products on sale on shelves within 3 years, "online and on land”. There are people who, for the first time are betting on exclusively Made in Italy food & drinks, in terms of products as well as experiences purchased by mail order, and now, online that are living a "second youth"; for instance, Postalmarket, one of the most trustworthy and historic Italian brands, which is targeting foreign markets. Furthermore, there are people who do not want to be stuck in the Pandemic. So, in the wake of the growing passion for cooking, they have for the first time chosen to turn to private individuals, focusing on E-commerce for selected gourmet and International ingredients, by top chefs, such as Longino & Cardenal, the reference point in scouting and distributing rare and exquisite haute cuisine foods. These models are becoming a business. They have revolutionized the distribution world, starting right here in Italy. It is common knowledge, locally, that the ones who wanted to bring the countryside to the city, have developed online businesses, delivering home purchases of very fresh products from companies on the outskirts of towns. One of the first in Italy is Cortilia, which is expanding from Milan to Rome and has plans to operate in the "physical" world as well, to offer an integrated omnichannel experience. And, there are the ones who founded businesses in the Covid-19 era, when this type of service really boomed during the lockdown. For instance, the young Florentine based startup, "Genuino.0", which is based on not having a warehouse or storage, to guarantee the freshness of the products it delivers from producer to consumer, within 24 hours maximum.
Taking into consideration the sales channels, the future has to be both "on the shelf and online, because the world food market online is less than 4%. The rest is linked to catering and remains on land, while 85% of what we eat at home is fresh products that are more difficult to market on the web, but we are trying”, Eataly founder Oscar Farinetti, said, “we have reached 15 million euros in online turnover and we expect it to grow. However, we are also very “politically” committed to the on land market, because I believe in human relations, especially in a country like Italy. To continue to be modern and win on the online market, you need to sell experiences and not just the product, otherwise Amazon will always win. Therefore, you need to improve them not only online, but by creating experiences for customers. Today we are active in 17 countries around the world. It is very important that Italian food is known abroad, because we have beauty to sell to the world. And, this is true above all in the food market, in addition to fashion and furniture, because we have the bulk advantage of having the largest agro-food biodiversity on earth, plus Regional cuisines.
Fifty percent of the products we sell are organic, and the rest come from sustainable agriculture. Our goal is to reach 100% organic products within 3 years, because we believe wholeheartedly in science, and science says it is easier and easier to cultivate it and transform it. As a matter of fact, to our worldwide slogan, “Eat Better, Live Better”, we have added, “Live More”. The message, especially after the pandemic, has created a lot of attention. But, we also want all of our stores to reach "Zero Waste", starting from Italy (Turin, Milan and Rome are zero waste ) and then around the world. Our Country needs to move right now, while instead we are standing still, and have no vision of the future, despite our potential. The direction to take, though, is very clear: focusing on our agricultural and manufacturing abilities. Italy is the only Nation in the world that could declare itself organic, and it would be a marketing "jolt" that would double exports”.
The Postalmarket catalog has been the symbol of mail order sales since the late 1950s. It has now returned to newsstands and launched an E-commerce and included a big space dedicated to "food & drinks". “The fact is that food is also fashion, and in terms of appeal to the consumer, the two go well together. Our strength is a well-known brand with a huge reputation among the Italians. We have a team of very young people, we have collected a series of startups, and we are incubated in H-Farm. We have the talents available to develop a series of factors ranging from technologies to marketing, as well as very fast "last mile" deliveries, allowing us to offer our customers an important customer experience, including blogs, experiences, tours and more. It is, therefore, not just a marketplace where products are sold, but we are very flexible, reaching the consumer directly who can then make a selection in both fashion and food. It was a risky bet that we have won, as the numbers are climbing higher than fashion's. Postalmarket is a bit like the "home of the Italians", with only Made in Italy brands. We would like to convey this model abroad where we are well known, as the 450.000 accesses to the site and 4 million interactions on the social medias demonstrate. Specifically, starting from the end of this year, with targeted campaigns, we will focus on Germany, France, the UK and beyond”, the General Manager, Alessio Badia, told WineNews, and then added, “our goal this year is to reach 8 million euros in turnover, and we are already well under way”.
Even Longino & Cardenal today are focusing heavily on E-commerce dedicated not only to chefs, but also to private consumers. They have more than 2.000 references, 98% of which are exclusive, even though they have always been a super traditional company, according to the typical model of Italian distribution through agents. “During the pandemic, restaurants were closed and sales were falling. Consequently, for the first time we decided to turn to the private consumer”, the CEO Riccardo Uleri explained, “and it was interesting, because our product is appropriate for retail. About 30-40 years ago the restaurant industry began asking for foreign products, an over the last 10 years the same thing has been happening among private individuals, thanks to the growing passion for cooking. Not everyone lives in Milan or Rome, and online is perfect to satisfy people who want to cook hard-to-find gourmet and international ingredients. We have therefore responded to a complementary and non-competitive need to catering by serving fresh products directly and in the same way. It is 80% of our offer, thanks to a ready-to-use widespread distribution network that lets us sell small lots to many people, and the average bill, though high, equals only one third of a restaurant business bill. The project has presented interesting results, even if we are still talking about 1 to 30 in terms of value. Online will definitely grow and bear fruit, but will not replace offline. We have also just launched b2b E-commerce, giving customers the opportunity to contact companies directly through a representative, or in person”.
Cortilia was established directly and only online, Marco Porcato, the CEO and founder recalled. It was “founded in Milan 10 years ago. There were 30 customers and 3 farms, mainly selling fruit and vegetables, believing that the freshest product par excellence was the key to entering Italian families’ homes frequently. It was a big challenge that the mass-retail distribution players were not pursuing online because they were starting with a marketplace model and no internal logistics. Today 85% of our turnover, which in 2021 reached over 40 million euros, is linked to fresh and very fresh products, thanks to thousands of families who shop online every week, even from their smartphones. They decide the day and time of delivery, choosing meat, fish and more from over 350 farms, thanks to rather sophisticated logistics that manage a very high level of distribution service. After we have reached all of Northern Italy, we want to continue our geographical expansion - soon we will also open in Rome. The past 10 years online has profoundly changed both in terms of Italians using it and the offer. In the past 3 years there has been, and in the next 5 years there will be an even bigger transformation starting from a monstrous growth in offering fresh and very fresh products. Unfortunately, it is also linked to international players because since we have a low E-commerce penetration, we are becoming a land of conquest. The market is moving from next day delivery, today for tomorrow, to quick-commerce in 10 minutes directly at home. This is the reason the service will be more and more an essential component of the experience alongside the quality product, as Amazon has done and Countries like the UK, France and Germany are doing. I agree experiences cannot be only online, so we have many open construction sites on the supply chains to mix with storytelling, and we will soon be looking to the physical world”.
A new distribution model that actually attracts and develops projects continuously, is "Genuino.0", a young startup that began in Florence in 2019, as Chiara Brandi , CEO and founder, explained, “from a need, which was to understand what my children were putting on their plates and what they were eating… and what I had found in mass retail stores did not sufficiently guarantee the origin of the ingredients. At that time, I was working in a company and I had very little time to go to the supply chain markets, and even less time to go to farms near Florence to make direct purchases. That is when I got the idea of using the web and digital to make sustainable purchases easier and more accessible for people living in the city who don’t have much time. We are fortunate to have a very large network of farms on the outskirts of Florence, as well as a Region where practically everything is produced. We started by selecting 15-16 producers and slowly grew. Since we were a startup, we had the advantage of being incubated in the Murate Idea Park Center, which allowed us to develop our idea into a business model. 2020, the year of the Pandemic, gave us a big push, so from one day to the next we received a myriad of orders. But one of the characteristics of startups is being extremely flexible and adapting quickly. We rolled up our sleeves to offer a service, and to take groceries to homes in a challenging time. 2021 was a test year in which we managed to maintain the same numbers as the year before. Now we are trying to understand whether our model can be replicated elsewhere, while continuing our incubation path to other companies outside of Florence. And, we are hoping to demonstrate that another distribution model is possible, based on the absence of warehouses and storage. It is the only way to guarantee the freshness of the products. When producers receive the online orders, they know they have two days of distribution to deliver only what has been ordered to us. In this way, we eliminate waste, and guarantee that the cheese you received at home at 6 pm was produced, at the maximum, 24 hours before”.
After all, added Farinetti, “our job is to bring producers closer to consumers, and vice versa. We produce 12% of what we sell in our own companies, and we have set this limit because we are against “one brand”. The figure of the merchant is irreplaceable. In my opinion it will be paid for by big producers that have decided to eliminate the intermediary, from Apple to Coldiretti, who although they are starting from different logics, they are arriving at the same conclusion. The logic of the merchant has never been replaced, but merchants change. There will be a huge increase in online sales, and just like when mass retail started, people are always afraid of something new. Today, it is not easy for anyone to predict the future scenario, even in communication. Once upon a time, if I wanted to inform customers, I bought a page from the newspaper "Corriere della Sera" in Milan, "La Stampa" in Turin and "Il Messaggero" in Rome, and the next day all my shops were full, from UNIERO to EATALY. One thing is sure, however. We are merchants who have decided to invest, first of all, in our suppliers, offering them all the services to go abroad, too - logistics bureaucracy, storage and sales channels”. And, Badia added, by making what they do not have available to them, while Brandi said, also by making it known through promotion, and Uleri added, by making the value of its products known, while Porcato said, not forgetting to support maintaining the right quality-price ratio of the products.
“The ones who do not want to do it are wrong, like the ones that have put overly high added values, or the mass retail stores that tend to sell only their own brand of products. These actions will push online shopping even more. But in the end”, Farinetti concluded, “the good ones will remain, whether they are online or on land. And, if they are Italian, I will be happy, but not for patriotism or like those who say that we must eat only Italian. Instead, we have to be open to the world, and nice. We cannot say buy our products, then not buy them from others. We have to venture out into the world, and deliver a perfect product everywhere”.